Stock Market News History in Review: 4 Biggest Crashes and Why They Happened

You’ve worked hard at your career for years on end, going to work every morning and staying late at the office to ensure you did your best. You put aside money from every paycheck, and now you’re ready to invest it and start building real wealth. By having true wealth, you can guarantee your security in retirement, afford to buy a home, and provide for yourself and your family for years to come. 

One of the best ways to build wealth is through the stock market. The stock market historically has a 10% return annually. Compare that to 10-year government treasury bonds, which have a 2.69% annual return, and a high-interest yielding savings account, which has a 2.20% annual return. You can see which one is the clear winner. 

The stock market is not without risk, though. A few times throughout stock market news history, the market has crashed in colossal ways. Sometimes, the entire United States economy suffered because of it, and other times investors in certain industries lost all their investments.  

Let’s take a look at stock market news, and the crashes on that made world history. 

1. The Wall Street Crash of 1929 


Stock market news history cannot be told without mentioning the Wall Street Crash of 1929, which led to the Great Depression. In the 1920s, the stock market quickly expanded and then reached a peak in August of 1929. The economy was already suffering at this point; unemployment was on the rise and production was decreasing. At the same time, wages were low, the agricultural industry was in peril, large bank loans were not being liquidated, and there was an excess of debt. Stocks were inflated as well. All of these factors led to the falling of the stock market in September and October of 1929.  

On October 24 – which is called Black Thursday is stock market news history – investors traded a record 12,894,650 shares. After that, Black Monday and Black Tuesday happened. On the latter, stock prices went completely underwater and investors traded an astonishing 16,410,030 shares on the New York Stock Exchange (NYSE). This caused billions of dollars to be lost and many investors lost everything they had.  

Then, the country went into the Great Depression. The U.S. only emerged from the Great Depression when President Franklin D. Roosevelt put relief and regulations in place, one of which was the New Deal. Some parts of the New Deal included the creation of the Civil Works Administration, the Social Security Administration, and the Farm Security Administration. The countrys economy also got better when it began producing again for World War II.  

2. Black Monday in 1987 

On Monday, October 19, 1987, Black Monday made stock market news history. The Dow fell by 22.6%, which was the biggest one-day percentage loss in all of stock market history.  

Investors around the world lost money for a few reasons. The economy had slowed and inflation was going up. Valuations were excessive, and portfolio insurance led to a false sense of security for brokerages and institutions. The Persian Gulf situation was getting more hostile, investors were fearful of higher interest rates, and there was a full-year bull market that hadn’t been significantly corrected. At the same time, computerized trading had sped up the selling and caused human traders to become more frenzied. Panic was to blame on Black Monday. 

Following the Black Monday stock market news, the NYSE installed circuit breakers, which halt trading when stocks decline too far and too fast. It stops investors from becoming too emotional and applying it to their investments. Thankfully, following Black Monday, the stock market eventually bounced back and the U.S. economy had one of the strongest bull markets in the country’s history. 

3. The Dotcom Crash 

Another notable piece of stock market news is the Dotcom Crash of the early 2000s. It happened from March 11, 2000, to October 9, 2002, and the Nasdaq Composite lost 78% of its value from it.  

In the late 1990s, the internet was all the rage, and dotcoms were thought to be the best new investments. People put tons of money into these companies, even though the companies were being seriously overvalued. Investors failed to follow the rules of the stock market, like analyzing P/E ratios, looking at business plans, and studying market trends. Investors were also pipe dreams, hoping to make money off new industries they didn’t completely understand.  

At the end of the day, the market crash led to a loss of $5 trillion for investors, and many companies went under. Amazon and eBay were two companies to survive the crash and come out the other side. Since then, investors have become interested in dotcom companies like Facebook and Groupon, even though there have been warning signs that these companies may also be overvalued. Time will tell if these stocks are not worth as much as investors think they are. Hopefully, dotcom companies won’t be making stock market news in a negative way again.  

4. Stock Market Crash of 2008 


The most recent stock market news you may have heard of is the crash of 2008. The crash of 2008 happened on September 29, 2008. Congress rejected the bank bailout bill, and in one day, the Dow Jones Industrial Average fell 777.68 points. Until 2008, it was the largest point drop of all time.  

Aside from the bank bailout bill, the subprime mortgage crisis led to the crash. Banks were giving out money to people who couldn’t afford mortgages, and when the money couldn’t be paid back, it had a huge negative effect on the economy. Lehman Brothers declared bankruptcy during this time, and Fannie Mae and Freddie Mac collapsed. The U.S. also lost 159,000 jobs in September of 2008.  

To help the economy recover, the Bush administration stepped in and introduced the Troubled Asset Relief Program, which recapitalized financial institutions. Many companies were saved, and it helped the economy get back on pace when President Obama came into office.  

Learning to Trade and Avoid Bad Stock Market News 

Don’t let the incidents of years past keep you from investing in the stock market now. Before signing up for a trading platform and buying up stocks, simply take these steps. 

  • Thoroughly research companies you want to invest in. Look at their stock price history, their earnings reports, the leaders in charge, any innovations they have on the horizon, and their market capitalization. See if these companies have delivered reliably in the past, or if they have had a bumpy journey. Stick to industries that are reliable, and ones that everyone needs to survive and function in the world. These include healthcare and energy, to name a few. 
  • Begin by investing in blue-chip stocks like Amazon, Microsoft, AT&T, and Target, and forget about investing in startups until you become an experienced trader.  
  • Don’t put every single penny you have into your trades. Set money aside specifically for trading and keep your retirement fund in a reliable mutual fund instead.  
  • Trade with logic, not your emotions. Don’t get caught up in panic or double down on losses. Go into trading with a clear mind. 
  • Follow stock market news on sites like CNBC and MarketWatch. Stay as informed as possible since your stock market education is never over.  

Subscribe to Fast Fortune Club 

If you want to ensure you’ll keep earning on the stock market, then subscribe to Fast Fortune Club, a newsletter delivered to your inbox that gives you advice on the stock market and shows you the latest stock market news. Tom Gentile, who runs the newsletter, will show you how to make serious returns on the stock market and build true wealth so you know you’ll be financially secure now and in the future 

All you have to do is subscribe, keep tabs on your emails, and take Gentile’s advice as it comes in. Over a cup of coffee, you can make hundreds of dollars, or even more. What are you waiting for? Subscribe to Fast Fortune Club today to start earning.  

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